Employer not obligated to keep same duties after arm of business sold; worker was initially assigned to unsafe office but immediately removed
A British Columbia worker has failed to prove her employer constructively dismissed her by stripping her of her duties and briefly having her report to an unsafe office in a trailer.
Cheryl Costello joined ITB Marine Group — a bulk transporter of refined petroleum products based in North Vancouver, B.C. that her husband founded in 1980 — in 1983, working as an office manager. Her duties included dealing with customers, pricing, proposals, collections, invoice support and administrative support with no supervisory responsibilities. She continued to work in an office administrator role until 2011, when the Costellos sold the business.
As part of the sale, Costello agreed to stay on with the business, signing a written employment agreement that described her job duties as “providing overall leadership and management direction of the operations” of ITB. The agreement noted that her position would remain based in North Vancouver and was for a one-year term.
Costello administered the North Vancouver office as she did before the sale of the company. The North Vancouver office also ran commercial diving operations, employing four commercial divers. In 2012, her employment agreement expired and she continued in the same position under an ongoing oral employment contract.
On Oct. 1, 2018, ITB sold the commercial diving operations to a company called Canpac Marine, which took over the North Vancouver office. ITB contracted with Canpac for its divers at preferred rates.
Costello’s boss with ITB told her that she would continue working with Canpac in North Vancouver until the end of the year, at which point she and another employee would move to ITB’s office in Burnaby, B.C. However, Costello was concerned that the sale of ITB’s commercial diving operations would leave her with little to do, although she was told she would be managing diver costs through ITB’s contract with Canpac.
Job duties changed
After the sale, Costello found that the work she had done related to ITB’s commercial diving operations — which was the bulk of the work in the North Vancouver office — “all but vanished.” Most of her time was spent packing up and moving boxes of material belonging to ITB to be sent to the Burnaby office.
At the end of 2018, ITB transferred Costello to its Burnaby office, which was located on a floating barge with a shipping and receiving office in a trailer. Costello found the office not suitable as she had motion sickness, so ITB arranged for her to move into the shipping and receiving office temporarily until a new trailer was prepared for her.
However, when Costello moved into the new trailer on Jan. 9, it wasn’t ready for occupancy, with unsafe stairs, black mould on the walls and no bathroom. ITB’s safety officer told her to leave and Costello worked from home after that, making occasional trips to the Burnaby office when necessary.
After about two weeks of working from home, Costello emailed the president and general manager of ITB on Jan. 21, 2019 to say she had “no substantial duties of any kind — other than packing boxes which is a minimum wage/labourer’s position.” She also pointed out the “generally filthy condition” of the trailer in which she was supposed to work, saying “I am supposed to work in an office trailer which would be unacceptable if I lived in the slums of Mumbai.”
Three days later, the president and the general manager met with Costello. The president said that there were “at least two years of projects for her to work on” that would be aided by her knowledge and experience and the general manager should be providing her with work. However, Costello wasn’t interested in learning about these projects and took the position that, if ITB wasn’t able to provide her with office administrative work, it should provide her with a severance package settlement. The executives weren’t willing to grant her such a package and ended the meeting.
The next day, Jan. 25, Costello’s legal counsel wrote to ITB stating that the company had repudiated the employment contract — by stripping Costello of all of her job duties, moving her into an unsafe working environment and dismissing her concerns about both — and constructively dismissed Costello and she wouldn’t be returning to work for ITB again.
ITB responded by saying that Costello’s position as office manager remained the same, her work environment was safe and that the Jan. 24 meeting came after Costello had sent an “inflammatory and inaccurate email.” The company said Costello was free to resign from her position and that, if it didn’t hear from her by the end of business that day, it would accept it as confirmation of her resignation.
Costello didn’t return to work and sued for constructive dismissal based on the removal of her duties, creating an unsafe working environment and responding to her complaints by “aggressively and disdainfully” telling her she was wrong at the meeting.
Changes necessary after restructuring
The B.C. Supreme Court disagreed that ITB had stripped Costello of substantially all of her job duties. It noted that her employment contract didn’t commit the company to providing her with the work she had usually performed during her time with the company and “some changes were necessary in consequence of the sale of the commercial diving operations and the restructuring of ITB’s operations.”
The court found that Costello anticipated not having enough work at the time of the sale but didn’t follow up with the president and general manager until months later. At that point, when they reassured her that there would be work for her, she wasn’t interested in hearing about it and requested a severance package, said the court.
“On Jan. 24, 2019, a reasonable person in Ms. Costello’s position would not have concluded that the essential terms of her contract of employment were substantially changed,” the court said.
As for an unsafe working environment, the court agreed that the decision to move Costello into the new trailer before it was ready for occupancy wasn’t justified. However, when she complained, ITB moved her out of it immediately and allowed her to work from home while the renovation continued. Since there was no attempt to return Costello to the trailer, she wasn’t forced to work in unsafe conditions, said the court.
The court also found that the president and general manager were probably “put off” by the tone of Costello’s email when they met with her and the president was annoyed with the general manager for failing to effectively manage her complaints, but there was no evidence they raised their voices or used disrespectful language. It was Costello who was upset and angling for a severance package, the court said in finding that the meeting didn’t constitute a breach of the employment contract.
The court dismissed Costello’s constructive dismissal claim, finding that ITB’s conduct did not repudiate the employment contract or dismiss Costello without cause or notice.
For more information, see:
- Costello v. ITB Marine Group Ltd., 2020 BCSC 438 (B.C. S.C.).
